At the heart of Shivalik Bimetals is the process of Electron beam welding (while they do follow other welding processes too, this is one of the important ones). Perhaps then it is useful to understand the process itself.
Here is a short video:
Another one:
A few key takeaways:
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This is a fairly technical process. The chamber where welding occurs has to be emptied off air & water molecules (better the vaccum, better the outcome). This is needed because otherwise the electron beams collide with the air/water & lose their energy.
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process uses kinetic energy of electron beam to produce heat energy (when electrons collide with metal atoms).
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This process requires extreme skill. The direction & exact angle of electron beam is controlled by a human using a lens. One can now imagine why this is called “precision” welding. The skill with which the human operator has to gyrate & move the lens & thus the direction of electron beam is not any less than the sort of skill a surgeon requires to do surgery. The biggest entry barrier thus is the person doing the electron beam welding. This is a technical know-how moat. The experience they have received by welding many kilometers cannot be aquired with money alone (of course people’s allegiances can be bought or sold).
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The cathode filament in the electron gun is heated to 2500C for continuous emission of electrons. For comparison, surface temperature of our host star (commonly known as Sun) is 5,505C (so the equipment operates at half the temperate of our host star surface. This shows us how dangerous this equipment is & how much are one must pay in operating it.
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Electron beam welding is also used in nuclear, ship building, medical devices. Looks like there exist a lot of adjacencies whenever (X years down the line) they might want to expand their core competency (which is not shunts, it is welding of bimetals or trimetals).
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Here are some “disadvantages” of electron beam welding:
Do those sound like disadvantages? Sound like entry barriers to me, each & every one of them. -
This also answers one of most IMP questions to me personally. This business can run itself, promoter competence was needed to jump-start envision then early execution. Now that they have skilled people doing the actual welding (pretty sure Mr ghuman does not do welding on factory floor), this is the sort of business buffett would want to own (anyone can operate). Promoter competence would definitely still be needed in doing new R&D developing new core competencies (new materials to weld, new process, new applications). But the opportunity size is so huge even for existing products, one cannot go too wrong buying at 20 times earnings imho.
